The way Jerry Williams tells his story today he was just down at the beach mucking around with friends when some kids said he stole a slice of pepperoni pizza and he ended up with a 25-to-life prison sentence under California's "three strikes" law.

This was back in 1994, after the crack cocaine epidemic had swept through America's cities and violent crime rates were soaring. Voters were scared and politicians introduced ever more draconian sentencing laws. Between 1993 and 1995, 24 states introduced three-strikes laws that could see anyone convicted of a third crime, however minor, sent to prison for life. Many others introduced harsh mandatory minimum sentences even for minor crimes.

This frenzy of legislation changed America's social fabric. In 1980, the US had 329,000 prisoners. By 1995, 1.5 million Americans were in jail. Today that figure is 2.4 million and the United States has the highest incarceration rate on earth. America has 5 per cent of the world's population and about 25 per cent of its prisoners. Among minorities, the figures are even more shocking. In the nation's capital, Washington, DC, three out of four young black men can expect to serve time behind bars. Around one in 28 American children have a parent in jail.

But something is changing. In 2012, the US prison population dropped by 1.7 per cent, the third year running a decline was recorded. And just last month the White House solicited applications for clemency for non-violent drug offenders, saying it anticipated reducing the sentences of thousands. More than once President Barack Obama has told his lawyers he wants to see more applications come across his desk.

According to Natasha Frost, associate dean of Northeastern University's school of criminology and criminal justice, what we are seeing today is the beginning of the end of mass incarceration in the United States. Even the death penalty is in retreat. What has caused the change is up for debate, though there are clues in Williams' case.

Back in July 1994 Williams was a tall 27-year-old warehouseman with a bad record. He could hardly have had a background better designed to provoke fear and outrage in the American middle class. He was, he told me this week, "a Crip from Compton" - a member of one of the most feared street gangs in one of the most violent parts of Los Angeles' burnt-out and wrecked South Central suburbs. He had five prior felony convictions, including for car theft, robbery and assault.

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One Friday he and some friends were hanging out on the pier on Redondo Beach. He claims he was "playing a stupid game of truth-or-dare with a friend" when he approached a group of kids whose parents had left them eating pizza at an outdoor table and asked them for a slice.

That is not how other people saw it. The pizza parlour manager says Williams intimidated the kids and stole the slice and he called the police. When they arrived Williams was still hanging around, not realising how much trouble he was in. Another man was identified, says Williams, but he stepped forward and put his hand up.

When he arrived at court the following Monday, having spent the weekend in jail, he was stunned by the media attention. Word had been leaked to the media that he was facing a three-strikes 25-year mandatory minimum, though he had no idea of this. "That's when my lawyer told me I was the star of the show," he says.

In court the prosecutor argued that even if the kids had said he could take the pizza, it was because they were intimidated by him.

Williams was a "habitual criminal, and that is what we are sentencing", said Deputy District Attorney Bill Gravlin. "The people of California are sick of revolving-door justice, they're sick of judges who are soft on crime. It is wrong to focus on the last offence."

The state attorney-general, Daniel Lungren, agreed, saying at the time: "This is precisely the type of person 'three strikes and you're out' was aimed at: career criminals. It's a victory for the people of California because this is a thug who has a record of violence in the past - serious felonies - who believes that it's OK to go out and terrorise little kids. Most of us are never going to be confronted with a murder or rape in our family. But we at least think our children can sit down in peace in broad daylight, without a six-foot four-inch 220-pound ex-con threatening them and taking away food from them."

Williams has a different take. "They sentenced me for my size and colour. I can't help my size and colour. I got 25 years for a $1.25 slice of pizza and for what I did before, not what I did on that day."

Mass incarceration might have begun in earnest with the crime wave of the 1980s, but it can be traced back to the "war on drugs" announced by Richard Nixon in 1971. When the crack epidemic spread, the language of justice and retribution was already in place.

In 1988, the link between black men and drug crime was made overt by the infamous "Willie Horton" ad that helped then-vice president George Bush snr demolish Democrat Michael Dukakis, his opponent in that year's presidential race.

In the ad a voice-over says Dukakis' policies allowed the convicted felon Horton to be freed from prison only to commit a further assault and rape. The ad ended with Horton's scowling face lingering on screen in high-contrast black and white.

It was so effective that Democratic strategists vowed never again to allow themselves to be outflanked on the right in a law-and-order campaign, says Frost, whose book The Punishment Imperative: The Rise and Failure of Mass Incarceration in America was published last year. Bill Clinton won the next election with a tough-on-crime campaign and in office ushered in the most punitive period in recent American history, funnelling huge amounts of money into the construction of new prisons. Meanwhile the states introduced their own three-strikes and mandatory minimum laws.

Frost believes some of the most extreme measures introduced were products of uniquely American circumstances. The war on drugs itself was born of Nixon's campaign, which in turn was based on what has become known as the "Southern Strategy". The strategy depended on energising a white conservative Christian Evangelical base in the southern states, in part by harnessing fears of minorities and a sense of biblical justice.

And she points out that in many states - including California, where Williams was convicted - laws could be drafted and introduced at the ballot by citizens' groups, which had no access to detailed public policy data in drafting their laws.

While the rise of mass incarceration is well understood, there is still debate about what ended the crime wave of the 1980s and early 1990s. Even as Clinton won office, the murder rate peaked and began a slow decline, and soon the crack epidemic waned too. Some argue mass incarceration worked, but Frost and other economists don't believe that is the case.

"If it had an impact it was marginal, about 10 per cent," she says. She believes demographic changes were a more significant cause of the decline. Crimes tend to be committed by young men and as the baby boom faded out there were simply less of them about.

She is also convinced by the controversial thesis of Steven Levitt of the University of Chicago and John Donohue of Yale University who argue that legalised abortion contributed to the drop in crime for similar reasons - due to the introduction of legalised abortion in 1973, there were fewer children raised in poor homes by the 1980s and 1990s.

Others have argued that those who survived the crack epidemic in the inner cities alive and free were so scarred by the experience they avoided crime or drugs from then on.

Whatever the cause, crime rates declined from the mid-1990s, by which time Williams was doing time at Folsom Prison. "Everyone called me Pizza Man," he recalls, "but they all thought I had killed a pizza delivery man. They could not believe I stole a slice of pizza."

With crime rates continuing to fall through the 2000s, law and order fell out of the top 10 lists of voters' concerns according to polls, but politicians, still fearful of relapses or high-profile crimes on their watch, maintained punitive policies.

It was not until the economic crisis of 2007 and 2008 that they were forced to act, says Frost. Mass, long-term imprisonment was simply too expensive for state and federal governments.

By then it was already clear that the war on drugs had failed. Despite the billions spent, drugs were still readily available and crime was still falling. In 2008 George W. Bush put money into rehabilitation and in 2010 Barack Obama signed the Fair Sentencing Act to reduce the disparity in sentences for people caught with crack and powdered cocaine.

Eventually California's law was amended, allowing judges to overlook one of the strikes and Williams was released in 1999.

Now he lives in Moreno Valley outside Los Angeles with his grandparents and the one-year-old son he has sole custody for. He has been arrested since his release, once for being drunk in public - "they tell you not to drink drive", he says grimly - and once for threatening a girlfriend in an argument. But he has not been in serious trouble. "It's not because of three strikes," he says. "It's because I grew up."